Thousands of Ford workers could be stood down and the car industry faces an indefinite shutdown as a key car parts manufacturer battles financial problems.

Thousands of Ford workers may lose jobs

Thousands of Ford workers could be stood down from Monday and the car industry faces an indefinite shutdown as a key car parts manufacturer battles financial problems.

Up to 4,000 Ford workers at plants at Broadmeadows in Melbourne and at Geelong may be stood down from close of business on Friday because of industrial and financial problems at parts manufacturer Coghlan and Russell Engineering, Ford spokeswoman Sinead McAlary said.

The warning follows earlier fears by union leaders that workers would be ordered home as early as Thursday, after 49 Coghlan and Russell Engineering staff at Geelong were stood down without pay last Thursday.

"For today and tomorrow, we have managed to reorganise production schedules for building cars that don't require as many Coghlan and Russell parts," Ms McAlary said.

"However, from tomorrow we will start to run out of a significant number of car parts. If, by close of business tomorrow, the issue is not resolved, we will be telling workers not to bother coming in on Monday."

Coghlan and Russell entered administration on Wednesday last week and its workers are fighting for $1.85 million in entitlements.

The Australian Manufacturing Worker's Union (AMWU) said the problems at the firm, which supplies about 40 different components to Australian car manufacturers, threatened to shut down the car parts industry and result in stand-downs across the sector.

AMWU acting Victorian secretary Steve Dargavel said the union was working with industry players and the administrator to secure a rescue package for Coghlan and Russell workers.

But he said it would be difficult given the significant amount owed to workers.

"Accrued entitlements owed to workers is creating big problems for the administrator to get the company up and running," he said.

"Most developed countries have a proper entitlement scheme that wouldn't put us in this place - this federal government does not have a proper entitlement scheme."

Mr Dargavel said the workers were ineligible to apply to the Commonwealth's Commonwealths General Employee Entitlements and Redundancy Scheme (GEERS) because the company had not entered liquidation.

"It is crazy to have a public policy that encourages car part manufacturers to go to the wall, liquidate, not produce parts, and then see tens of thousands of people stood down from our industry, it is simply insane," he said.

Ford says it will open a phone hotline for its workers over the weekend for further advice if the stalemate remained.

Toyota was unaffected while Holden was monitoring the situation.

"Coghlan and Russell don't directly supply us, but they do supply Delphi, who are our suppliers," spokesman John Lindsay said.